Star Entertainment now faces more civil penalties due to allegations that it has left customers to use risky back channels to move cash around and has continued to service customers exposed at higher risks in violation of federal anti-money laundering laws.
The Australian Transaction Reports and Analysis Centre (AUSTRAC) filed a case against the company listed on the Australian Securities Exchange (ASX) in the federal court on November 29th, 2022, after putting an end to a joint probe with police forces and gambling regulatory bodies in New South Wales (NSW) and Queensland, which originally started in September 2019.
The civil lawsuit is lodged after a Royal Commission-style inquiry into Star Entertainment’s business in the state of NSW resulted in the company being stripped of its casino operating permit. The Australian gambling giant also faced an unprecedented monetary fine of AU$100 million in October this year. The Government of Queensland has also issued a show-cause notice against the companies as to why it should continue to hold a casino operating permit in the state after a separate inquiry was held last month.
Robbie Cooke, chief executive officer of Star Entertainment, said that the company had cooperated with investigators and was now reviewing the statement of claim issued by AUSTRAC. He noted that the gambling operator had been transforming its business and corporate culture, and was now committed to making an improvement, although there was a lot more work to do.
Poor Governance, Risk Management Failures Also Found at Star Entertainment Along with AML and CTF Violations
The chief executive officer of the Australian Transaction Reports and Analysis Centre, Nicole Rose, reminded that all casinos must take their obligations under anti-money laundering laws seriously because criminals would always seek to exploit the financial system to launder their dirty money.
Ms Rose revealed that the investigation held by AUSTRAC had identified a large variety of issues, including poor governance and failures of Star Entertainment’s risk management. The company also failed to maintain a programme that complied with anti-money laundering and counter-terrorism financing. Furthermore, Star Entertainment was found to have failed to provide the necessary and suitable ongoing customer due diligence, which eventually resulted in serious and widespread non-compliance over a few years.
As revealed by the Australian government financial intelligence agency, it will allege Star Entertainment let customers transfer money through very risky and non-transparent channels. Apart from that, the gambling giant is set to face AUSTRAC’s allegations that it was unaware of the origin of the money in those channels and failed to take into consideration its own business relationships with customers exposed at higher risk.
According to reports, the AUSTRAC is set to commence civil penalty proceedings against two units of the Star Entertainment Group – The Star Entertainment Qld Ltd and The Star Pty Ltd. Although the Australian financial regulator noted that the compliance issues were not only serious but also took place systematically, it did not provide more details about the damages or penalty it was seeking in the civil legal action.
- Author
Olivia Cole
